Utilities Projects Using Performance Contracting Mark K. Krog Siemens Building Technologies DTI Community Partnerships W

1. Utilities Projects Using Performance Contracting Mark K. Krog Siemens Building Technologies DTI Community Partnerships Workshop, San Antonio, TX October 18 - 19, 2005

2. Agenda • Introduction • Project – Effluent Irrigation • Project – Dyess Self-Generation • Project – Goodfellow Self-Generation • Conclusions

3. Introduction • Performance Contracting • Utilizes legislation to address infrastructure issues in a proactive manner • Allows for modernization to occur when capital funds are limited or restricted through Energy and Cost Savings • Re-directs operational expense towards capital improvements with a Neutral/Positive Cash Flow • Turnkey Project Performed Now • Guaranteed Results

4. Introduction • What is Performance Contracting? • Preliminary evaluation of opportunities with the ESCO 100% at risk • Letter of Intent outlining project goals and constraints • Detailed/Investment Grade Audit to define final costs and savings to meet goals within constraints • Contract that includes scope, guarantees, financial solution and ongoing division of responsibilities • Turnkey Project Implementation • Performance period including Measurement & Verification, Service, On-going Maintenance

5. Project – Effluent Irrigation • Scope • Two 11M gallon ponds (one acts as a water hazard on the golf course) for effluent storage • Two pump stations and 3 miles of piping • Negotiations for effluent water delivery and design and routing of piping for the City

6. Project – Effluent Irrigation • Results • System is working as designed • Savings are greater than predicted (155,000 kgal of effluent for the 11+ months compared to the predicted 160,000 kgal/yr) • Irrigation loads still being added • 2003 Presidential Award for Leadership in Federal Energy Management Award for “Results” • Two subsequent task orders (to date)

7. Project – Effluent Irrigation • Strengthened ties between the City and one of the major customers • Returned 2% of potable water supply back to the City • Resulted in additional revenue to the City of Abilene • Generated savings for Dyess AFB and improved the landscape for the base

8. Project – Dyess Self-Generation • Dyess AFB will become first military installation to provide all its power onsite • The power will be renewable (Waste-to-heat) • City of Abilene will save up to $1 million annually • Dyess AFB will save over $3 million annually • Labeled by the USAF (ACC, AFCESA) as the most outstanding energy project ever • Should be online in 18 months

9. Project – Goodfellow Onsite Generation • Recommended to the City of San Angelo by TCEQ • Want to follow the Dyess model however with the city taking the lead • May involve a leaseback scenario enabling the military to receive double credits due to new energy legislation coupled with double tax credits

10. Conclusions • Projects viewed where community steps in and provides critical support to base’s mission • Projects can be energy, utility or cost reductions • Projects can be revenue enhancing • Financing and unique technological solutions should be considered as some of the primary drivers

11. Questions